Each year I pick a reading theme that fills in my time. My primary blocks of reading time in our marketable security business line are filled with companies I have already researched before. Once current on those I like to explore. Having a theme for the year helps give me structure so I don’t wander into current events. Most years I pick some crazy goal like, “Let’s try and read every annual report for last year for every publicly traded insurance company.” Then, I create a checklist and motor down it. This year my theme was “Learn from the greats.” (I think I got annoyed by reading so many bad annual reports I needed a break. I also had several pretty good ideas lined up for 2023 marketable security investment plans.)
If you have read to this point you might have interest in reading more… including some annual reports. I encourage you to read some of the best to get a sense of what greatness reads like. Near the beginning of Little Engine Ventures I read every annual report Warren Buffett ever wrote, including partnership letters I could get via books prior to Berkshire Hathaway. While Mr Buffett has not written a book, he has written thousands of pages of some of the absolute best letters to shareholders.
As a business owner you might be wondered, why should I read letters written to owners? Well, have you ever considered the self-talk you conduct with yourself? Are you clear in your thinking? A public company CEO or Chairman, or anyone else on the team, is not required to produce a letter to shareholders. But, it is a common practice. And the best letters have clear thinking and leaders that run companies that outperform. If you are looking to outperform, get your thinking clear, and do so by writing down your thoughts. If you want to see what good looks like, turn to the pros and work backward.
On a day-to-day basis, I find reading annual reports to be helpful. They pull be up from the day-to-day grind of DocuSign, contract reviews, and project guidance. I get to work on my business from above the forest. It’s like counting cash by hand. You can feel what the real thing is like and you can spot the fraud.
So, read. Then, journal. My favorite is to do a quick scan of an Annual Report of a company I find inspiring. Get the overall structure. What is contained herein? Drill into the letter portion and see if the rest of the report lines up with the structure. If it does you probably have a top 20% company on your hand already. Many letters are so lame and disconnected from the whole that you can immediately tell the CEO is out of touch with his company’s big areas. Next, look for a pyramid of data in the structure. Does the author deliver the purpose and big thing right up front? Can she unpack it brick by brick? If the first two sentences of the letter do not do this you likely have a lame leader in your hands… despite the millions in compensation they may receive. Then, look for punch and entertainment. As weird as this may seem, the punch comes in the clarity and the humor reveals someone that loves what they do –and isn’t scared by the attorneys asked to review their words.
Now, specifically to small business. Look for specific “tips” from these leaders. One of the most impactful things I read in an annual report was so stupid simple. The author said, “we route more call volume to our best agents.” That’s it. That idea stuck in my head. It was laser clear and showed what they valued and how they treated their people and the way they would train, promote and manage the flow in inquiries from prospects and customers. From that moment I began unpacking that idea in their report and others. I carried it with me. You can do likewise.
Finally, look for business models that you can pattern after. Large companies did not become large because they have a broken business model –most of the time. What is it that allowed them to become large? Unpack that by reading. Go back in time as warranted. There might not yet be a book about how this or that successful company became what it became. Maybe you can find what they did and pattern your company after it? Implement your unique speciality into that model?
My business partner, Mikel likes to say that a small business is not just a scaled-down big business. They are different in unique ways. And, I think that is true. And in many ways, small businesses are broken in ways that big businesses have solved for. That is a difficult reality that I have learned to address. Small businesses rarely stay small by conscious choice. Usually, small businesses remain small because of a lack of leadership. So, learn from leaders of larger organizations. If you don’t have the time to ask other leaders then ask them by reading their writing.